ECOM4000 Economic Impact of the Virus – Economics Assignment Help

Assignment Task

Task

Section A: Microeconomics

Question 1:

Identify the market structure Coles and Woolworths operate in. Make sure you justify your choice of market structure using all of the market characteristics used to classify markets. Using your own independent research, provide some facts and brief comments on this market (for example you may like to discuss metrics like the concentration ratio).

Question 2:

Because of their market positions, Coles and Woolworths exhibit a great deal of interdependence and actively advertise against each other. In particular, Coles has been successful with their “Down Down” campaign. Briefly explain what this campaign is, and explain the effect you think it has had on the market position and profitability of both Coles and Woolworths. Draw appropriate diagrams for this market showing the market outcomes for Coles and Woolworths.

Question 3

Consider a “game” between Coles and Woolworths that the supermarkets may participate in. The rules of the game are:

• If both Coles and Woolworths keep prices low, then they will both make a profit of $5,000m.
• If both Coles and Woolworths keep prices high, then they will both make a profit of $8,000m.
• If one supermarket keeps prices low and the other keeps prices high, then the low price supermarket will make $9,000m profit and the high price supermarket will make $4,500m profit.

Section B: Macroeconomics

Question 1:

Using your own independent research, summarise the effect the coronavirus has had on the Australian macroeconomy. At a minimum, your answer should include commentary about the effect on Australian GDP, unemployment, inflation and other aspects of the Australian macroeconomy. Support your comments with appropriate economic data. (Make sure you use reputable economic sources and reference your sources.) (6 marks)

Question 2:

Draw a diagram of the Australian macroeconomy using the aggregate demand and aggregate supply (AD/AS) model before, and then after the virus. Clearly show on your diagram(s) the before and after effects for the macroeconomic variables discussed in Question 1.

Question 3:

The Federal Australian Government was very aware of the effects of the virus on the Australian economy.Using your own independent research, explain the fiscal policy actions the Government undertook to combat the economic impact of the virus. (Make sure you use reputable economic sources and reference your sources.) Using your diagram from Question 2, show how the government action affected the Australian macroeconomy. Comment on how successful the government action has been, and identify any weaknesses associated with it.